Strategy Comparator: Paydown vs Invest vs Sweep HELOC

Side-by-side modeling of three uses for a client lump sum. Neutral, defensible, with every number labeled as an estimate at the assumptions you enter. Estimates only

This tool is for illustration only and does not provide investment, tax, or legal advice. Consult your own financial, tax, and legal advisors before making decisions.

Inputs

Mortgage balance

Mortgage rate, %

Remaining mortgage term

Available cash lump sum

Extra monthly surplus

Assumed annual investment return, %

Enter your own assumption. Past performance does not predict future results.

Marginal tax bracket, %24%

Sweep HELOC rate, %

Adjustable-rate assumption, not an offer.

Average cash kept in sweep account

Time horizon, years10 yrs

Side-by-Side (after-tax, estimated)

Pay Down Mortgage

$69,326

estimated interest saved over 10 years

Fixed return = mortgage rate
Locked in home equity
No market or rate risk

Invest

Enter assumption

Investment return is required to estimate growth.

Uncertain return
Liquid
Market risk

Sweep HELOC

$52,500

estimated interest offset over 10 years

Variable-rate offset
Liquid
Rate risk

Visual comparison

Pay Down$69,326

Invest-

Sweep HELOC$52,500

Enter an investment return assumption above to see the full comparison. Paying down the mortgage is a fixed return at the mortgage rate but locks the cash in home equity. Investing keeps the cash liquid but the return is uncertain. A first-lien sweep HELOC keeps the cash liquid while offsetting interest on the balance, but the rate is variable; if rates rise, the offset value falls.

Note on the sweep HELOC line: The sweep option compares the gross interest offset from the cash balance. It does not factor in any rate differential between your current mortgage and the HELOC. Sweep HELOC has eligibility limits and is not suitable for everyone.

Pay-down savings shown after-tax using the marginal bracket. Investment growth is taxed at the marginal rate as a conservative proxy; qualified accounts or long-term capital gains treatment would yield different after-tax outcomes. Sweep offset is shown pretax = after-tax because HELOC interest is generally not deductible.

Want this scenario priced and packaged for your client?

Optional. Results above do not require this form.

Estimates only. Actual results depend on rates, returns, taxes, and timing, all of which vary. The sweep option is an adjustable-rate first-lien HELOC; rates and payments can change. Not a commitment to lend. All loans subject to qualification. Equal Housing Opportunity.

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